What Are the Costs for Medicare Advantage Plans?

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How Much Does a Medicare Advantage Plan Cost?

Costs of Medicare Advantage Plans vary depending partly on what coverage options you choose. In some cases, you may find that Medicare Advantage offers you more services and coverage for less money than Original Medicare. A good first stop when you are determining the best plan for you is the government’s Medicare site, which allows you to compare the different plans available in your region.

With Medicare Advantage, you will still receive Part A coverage, for which there is no premium if you have worked at least ten years and paid Medicare taxes. You will typically pay a monthly premium for Part B, which is $170.10 in 2022. However, your plan may include partial coverage for your Part B premium. You may qualify for Medicaid, which reimburses the Part B premium based on income.

Even if you don’t have to pay a premium for Parts A and B, you may pay a monthly premium for your Medicare Advantage Plan. Most Medicare beneficiaries in the country have access to at least one zero-premium plan that includes prescription drug coverage.

Medicare Advantage Plan Premiums

According to the Kaiser Family Foundation, a non-profit organization that focuses on health issues in the U.S., 60% of Medicare Advantage enrollees pay only their Part B premium each month. Another 17% pay $20 to $49 a month in addition to Part B, while 12% pay $50 to $99 monthly. Only 6% pay more than that, and the average is $25/month. This includes plans with Part D drug coverage.

Other Costs to Consider

Knowing what your monthly premium is going to be is important when you’re comparing plans, but it’s only part of the story. There may be other costs involved in your Medicare Advantage plan, such as deductibles, and copays or coinsurance charges.

  • Copayment: A copayment is simply the amount you pay when you visit a doctor, pick up your medications, or are involved in other healthcare transactions. With your drugs, there are different pricing levels. Generic drugs from an in network pharmacy have the lowest copays, and brand name or speciality drugs cost more. Coinsurance is similar, but you pay a percentage of the charges, rather than a set amount.
  • Deductible: A deductible is the amount that you have to pay before any Medicare payments kick in. Your Medicare Advantage documents should show you your annual deductible, if there is one.

Out-of-pocket maximum: Unlike Original Medicare, Medicare Advantage Plans are required to have an annual out-of-pocket maximum. The out-of-pocket max for 2022 is $7,550 for in network services and $11,300 for in and out of network services combined. Your plan may choose to set lower limits. Once you’ve paid the maximum amount for your plan, you should have 100% coverage for your Medicare-approved healthcare costs for the rest of the year. Prescription drugs and extra benefits that Medicare doesn’t cover, such as hearing or vision exams do not count toward your out-of-pocket maximum.

How Do I Compare Medicare Advantage Plan Costs?

To compare Medicare Advantage plan costs, it helps to look at the benefits you’re getting with each plan. Take note of whether your plan includes drug coverage or not since that can be a considerable expense if you are on a maintenance schedule with any drugs to manage illness. Also look at whether your plan covers vision, dental, or any other similar health needs. If it does, you may save money with the plan even if the premiums are higher.

You’ll want to consider those monthly premiums as well as your copayments or coinsurance for each doctor visit or prescription. Then consider your deductible, which can impact the total you are paying each year for medical costs.

For example, let’s say a plan has no monthly premium but the drug copay is $20. Another plan has a monthly premium of $40 but a $5 drug copay. If you take three medications that need to be refilled every month, you pay $60 with the first plan, and $15 with the second. Adding in the $40 premium for the second gives you $55. So you’re still paying less per month with the second plan than the first, even with the higher premium.

It may also help to look at your plan’s annual out-of-pocket maximum, which includes all copays and coinsurance but not premiums. If you see your doctor frequently or have any surgeries or hospitalizations, you may reach your maximum out-of-pocket expenses. A low annual drug deductible could be helpful if you require many prescription medications.

It may take a little work to determine all the pros and cons of each plan, so you can effectively compare the benefits of a variety of different options, but it’s worth taking the time to do so. Your cost savings and breadth of care options may be greatly enhanced by choosing the right plan for you.

Can I Get Payment Assistance for Medicare Advantage?

If you need help paying for your Medicare Advantage plan, look at a Medicare Savings Program. These plans are administered by each state in the U.S. There are four different types of plan, and you may qualify if you have low monthly income and/or are a working disabled person under the age of 65. Medicare Savings Programsgenerally pay for Medicare Part A and B premiums, and may help with deductibles, coinsurance, and copayments.

The four plan types are (income and resource limits are for 2021):

  • Qualified Medicare Beneficiary Program, if your individual income is $1,094 or less per month and you have less than $7,970 in resources (resources include money in checking or savings account, stocks, and bonds)..
  • Specified Low-Income Medicare Beneficiary Program, if your individual income is $1,308 or less per month and you have less than $7,970 in resources.
  • Qualifying Individual Program, if your individual income is $1,469 or less per month and you have less than $7,970 in resources.
  • Qualified Disabled and Working Individuals Program, if you are a working disabled person under 65 who lost premium-free Part A when you went back to work, and meet income and resource limits set by your state.

Medicare suggests you consider applying for one of these programs even if your income and resources are higher than the indicated amounts. If you are married, limits are higher. To find out more about the program that is in place in your state, contact your state’s Medicaid Program to see if you qualify.

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Medicare consultant and expert, seniors advocate, and author

Ron Elledge is an accomplished Medicare agent, planner, and author. Elledge earned a bachelor’s degree in Bible theology from International Seminary and spent 30 years in pastoral ministry. He began his current career in insurance with a specialty in Medicare in 2008 and has since authored “Medicare Made Easy: What Expats, Frequent Travelers and You Need to Know” and is often a featured speaker at the International Living conferences. Elledge is a contributor to International Living, supporting Medicare beneficiaries with articles, podcasts, and Q&As.

“A licensed seniors market insurance agent in Arizona and New Mexico, Elledge has helped thousands decipher the intricacies of Medicare rules and regulations, enabling them to make educated selections for their health care needs. As a world traveler with his wife, Shelli, Elledge specializes in Medicare for expats and frequent travelers. He’s up to date with Medicare regulations, coverage options, and enrollment protocols and is fervent in his resolve to present trustworthy data on this confusing and often maligned program.

“By obtaining dependable details on how to read their Medicare options, recipients can plan for it correctly and make the best choices,” says Elledge. “These choices often make a huge financial and emotional difference in their futures. When Medicare is correctly utilized, it becomes a powerful financial and medical tool for all who qualify.”

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